Saving Iceland

By Ben Holland, Bloomberg

It was the week before Christmas in Reykjavik, and all through the town Eva Hauksdottir led a band of 60 whistle-blowing, pan-banging, shouting demonstrators. “Pay your own debts,” they yelled as they visited one bank office after another in Iceland’s capital. “Don’t make the children pay.”
When she isn’t leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent. Read More

Aftaka.org – Since early this winter, Iceland has been facing economic crisis. The three major business banks have been nationalized, putting their dept on the people’s shoulders. People have been losing their livelong savings, loans have increased and are getting sky high (and for sure they already were high enough). 200 people lost their job, every single day of November and more and more people are facing the threat of losing their houses. Read more on Aftaka.org.

Haukur Már Helgason, Il Manifesto (Italian daily) – Last April, the government published a report about “Iceland’s image”, written by a committee of leading business people in Iceland. The report summarizes Iceland’s history thus: “For a long time, the nation lived through hardships, but once it achieved freedom and independence it took a leap from being a developing country to becoming one of the richest nations in the world, in less than a century.”

This October, the only growing business sector in Iceland is body guards. It’s booming. For the first time in Iceland’s history, the heads of state, politicians and stock exchange „entrepreneurs“ are surrounded by professional muscle-men. After six to ten years of private ownership, and constant staggering growth, all three major banks in Iceland collapsed in a week, unable to pay their debts. Economically they had become 10 times bigger than Iceland itself. The state, led by the Central bank re-nationalized all three of them, one by one. Read More

The men who made Iceland go cap in hand to the IMF are now bent on ruining its landscape

Björk, The Times – After touring for 18 months I was excited to return home a few weeks ago to good, solid Iceland and enjoy a little bit of stability. I had done a concert there earlier this year to raise awareness about local environmental issues and 10 per cent of the nation came to it; but I still felt it wasn’t enough.
So when I returned I decided to contact people all over the island who had attempted to start new companies and bring in new greener ways of working but had not succeeded. For a long time Iceland’s main income was fishing, but when that become uneconomic people started looking for other ways to earn a living. The ruling conservatives thought that harnessing Iceland’s natural energy and selling it to huge companies such as Alcoa and Rio Tinto would solve the problem.
Now we have three aluminium smelters, which are the biggest in Europe; and in the space of the next three years they want to build two more. The smelters would need energy from a handful of new geothermal power plants and the building of dams that would damage pristine wilderness, hot springs and lava fields. To take this much energy from geothermal fields is not sustainable. Read More

Jaap Krater, Morgunblaðið, 26-10-2008

In times of economic crisis, it is tempting to embrace new megaprojects such as new power plants and aluminium smelters. But will this realistically improve Iceland’s economic prospects?

Prime minister Geir Haarde recently explained on Stöd 2’s chat show Mannamál that one of the main reasons for the fall of the Krona, was due to the execution of heavy industry projects: the construction of Kárahnjúkar and Alcoa’s smelter in Reyðarfjörður. If more large projects are executed, what will the cost be for the Icelandic taxpayer?

Haarde’s comments were not surprising. Before construction of Kárahnjúkar many economists predicted the negative impact on inflation, foreign debt and the exchange rate of the ISK.

Of course there is some economic benefit from new smelters, but “it is probably outweighed by the developments’ indirect impact on demand, inflation, interest rates and the ISK exchange rate,” stated a report by Glitnir in 2006 on the impact of aluminium expansion in Iceland. The report expected an increase in inflation and a depreciation of the ISK.

“Kárahnjúkar will never make a profit, and the Icelandic taxpayer may well end up subsidising Alcoa,” said the eminent economist Thorsteinn Siglaugsson after publishing another report on the profitability of the Alcoa dam in East Iceland before construction commenced. Read More

Andri Snær Magnason, Fréttablaðið – In these turbulent times interested parties use the opportunity to offer us “solutions” and relief. This time around it involves “alleviating all restrictions” and putting public energy companies up as 300 – 400 milliard collateral for two to three new aluminium plants. This is what is on the drawing board when the total debt of OR and LV (the central public energy institutions) are already at a dizzying 550 milliards – mostly because of Alcoa and Norðurál (Century Aluminum). This is why the banks always preached large-scale industry policies – more debt – more joy. It’s down to the price of aluminium to repay these loans, but aluminium prices are plummeting and a level of overproduction has already been reached. The nation believes that the magic term EXPORT EARNINGS is money that will end up in the nation’s pocket. News of export earnings and foreign currency receipts have time and again been directly false and treacherous. A bar chart published in the Morgunblaðið newspaper the 11th of October depicts the aluminium industry as more important than the fishing industry and considerably larger than the tourism industry. But the presentation is exactly as the INTERESTED PARTIES would like to have it portrayed in the media. When Alcoa Fjarðaál claims to export for 70 milliards a year, most Icelanders believe that this is currency that we can use. Read More

For the last two weeks Iceland has been facing economic crisis, the worst since 1914. The Icelandic Króna (ISK) has fallen lower than ever and the whole economy seems to be close to a total collapse. How did this start and how does it look now?

The collapse of Iceland’s bank system

The morning of September 29th was the beginning of the crisis for the Icelandic public, when it was announced that the State and Glitnir, one of the tree big banks of Iceland, had come to an agreement that the State would buy 75% share in the bank. Signs of economic crisis have been visible for quite a long time in Iceland; economics and leftists have been warning the Government, but until September 29th, the Government and the Banks have repeatedly ignored these warnings and stated that everything is fine. According to Iceland Review “the state is not planning to be a majority owner in Glitnir long-term; the purpose with these actions is to secure economic stability.” At this time Glitnir had lost c.a. 85% of its share value when the stock market closed Friday September 26th.

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By Snorri Páll Jónsson Úlfhildarson, originally published in Morgunblaðið –

In his article, “Is There Enough Aluminium in the World?” Jakob Björnsson, former director of energy affairs points out that “by far the biggest part of alulminium usage in the world today is in the industrial countries, where 25% of the people of the world live.” He also mentions that when China and India will have gone through proper indutrialization, 62% of humanity will live in industrial countries and the other 38% are also on their way there; that they want to enjoy the indstrialized countries’ living standards, even dream of cars and beer cans. These are very important facts.

Two things make Jakob’s article very interesting. Firstly, he says that it is a realistic oppurtunity that all human beings on the planet can reach the “qualities of life” and lifestyle that Occidentals now live with. Secondly, he states that human equalitiy is possible inside the system we live in. Read More

Tom Henry, Toledo Blade – ILULISSAT, GREENLAND — Beyond the howl of sled dogs echoing across this hilly coastal village is the thunderclap of ancient icebergs splitting apart, a deafening rumble you feel in your bones. There’s no mistaking its big, loud, and powerful boom, a sound that can work up to a crescendo like rolling thunder. Or be as sudden as a shotgun blast. Lifelong Greenland resident Karen Jessen Tannajik said people who live in Ilulissat — an Inuit word for icebergs — notice more about what’s been calved by the village’s nearby Sermeq Kujalleq glacier than sights and sounds. Read More

Economist.com – When thinking globally requires unpleasant action locally.
LAST Thursday, at a conference on aluminium smelting in Germany, environmental activists tripped the fire alarms. Later, they set off a deafening rape alarm in the main auditorium, and suspended it out of reach of the indignant organisers using helium balloons. They also chucked in a few stink bombs, and scattered leaflets among the bewildered crowd.
Protesters from the same group have chained themselves to machinery, suspended banners from building façades and blockaded construction sites, to name just a few of the activities that have got them arrested, all in the name of “Saving Iceland”, as their organisation is called. Their grievance is simple: they do not think that power companies should be building dams and drilling wells for geothermal plants in pristine parts of Iceland, simply to provide power for aluminium smelters. Read More